EU product market definition under Article 82 Treaty of Rome
Competition law is the ‘law which seeks to promote economic and business competition by prohibiting anti-competitive behavior and unfair business practices' .
In Europe, the Common Market was established by the Treaty of Rome.
Two articles in the Treaty are fundamental, the article 81 and the Article 82 which prohibit any abuse of dominant position in the market.
The main goal of these articles and the EU Competition law in general is to have an effective market and a consumer protection; that is why this law is directly applicable to member states.
The ‘essence of the Article 82 is the control of marketpower' as well as an effective protection of the market and a detection of any abuse which requires an economic analysis. To determine the dominant position of an undertaking, three elements must be taken into account in the general definition of the market: the product market, the geographical market and the temporal factor.
Here, we will analyze the product market under Article 82.
[...] When there are differences in the price, products cannot be interchangeable. Concerning the intended use, the need of a product by a purchaser is explained by special characteristics of this, which makes it different from another one and corresponding to a particular category of the population. Other products are in the same market if they can satisfy the same need, which can be seen in the Commercial Solvents case[11]. In the Hugin case[12], the special use for spare parts intented by Liptons was not enough narrowly defined in the market of spare parts. [...]
[...] AKZO[26] is a similar case, but the Court The ECJ held in favour of the Commission and adopted a wide market definition. Hence, two similar cases and two different positions of the Commission. I. THE FIRST AND CORRECT APPROACH OF THE PRODUCT MARKET DEFINITION IN THE UNITED BRANDS CASE(1978)[27]: analysis The case deals with the infringement of Article 86 of the Treaty (now 82) because of an abuse of a dominant position concerning the bananas'production but the real problem is about the relevant product market definition.The two parties presented different arguments. [...]
[...] ECJ, Hoffmann La Roche v. Commission [1979] ECR 461, [1979] 3 CMLR 211. ECJ, United Brands Compagny and United Brands Continentaal BV v. Commission [1978] ECR 207 ECJ, Eurofix-Bauco v.Hilti OJ [1988] L 65/19; [1989] 4 CMLR 677, appeal Case T-30/89 Hilti AG v. Commission [1991] ECR II-1439, [1992] 4 CMLR 16. ECJ, ICI and Commercial Solvents Corpn v. Commission [1974] ECR 223, [1974] 1 CMLR 309 ECJ, Hugin v. Commission [1979] ECR 1869 [1979] 3 CMLR 345 ECJ, AB Volvo v. [...]
[...] Concerning the notion of price, the Court showed that there are repercussions on bananas only concerning the price because when the price of some other fruits (that is to say the table grape and the peach) decreases in summer, the banana price decreases also even if it is not significant. The ECJ concluded that the banana is a product needed by a big part of the consumers and in a constant way. During a short period, while there are other fresh fruits on the market, the banana product is not affected and it is not possible to talk about substitutability in that case. [...]
[...] To conclude, the identification of the relevant product market is crucial to determine if an undertaking is in a dominant position. But the definition of the product turns out to be contentious and especially for spare parts where the Commission still hesitates to determine the issue and which is the most part of the time debatable. Even though the Commission has a fundamental role to define the product market, as the ECJ and even though the United Brands case was significant in this context, the definition is not really clear and insufficient in circumstancial functions. [...]
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